Basic Medicare Facts for Americans Abroad
NOTE: Information below touches on only a few points of this very complex subject. The Medicare website (www.medicare.gov) is a rich source of information and personalized advice.
If you already live abroad, you should consult with the Federal Benefits Unit of the American embassy serving the country where you reside for personalized advice. They have direct access to the Social Security files, and have experience with problems specific to people residing outside the US. Website links to American embassies worldwide can be found at www.usembassy.gov.
The single most basic fact is that you are not covered by Medicare while living abroad (with very rare exceptions). That said, you may still need to consider enrolling in one or more parts of Medicare.
Basic rules on qualifying for coverage
Workers (and spouses of workers) who have contributed at least 40 quarters (10 years) to Social Security are eligible for Medicare coverage at age 65 even if Social Security "full retirement age" is more than 65 years.
Individuals who are eligible for railroad retirement benefits, or who have worked long enough in a federal, state, or local government jobs can also qualify for coverage.
Certain other categories of individuals (such as those on Social Security disability) may qualify for one or more parts of Medicare earlier than 65 or under certain conditions.
For greater detail on qualifying for Medicare, see: http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/400/~/how-to-qualify-for-medicare
A succinct overview of Medicare can be found at: http://www.socialsecurity.gov/pubs/10043.html#a0=2
General information on Medicare is available at: http://www.medicare.gov/people-like-me/new-to-medicare/getting-started-with-medicare.html
Information specific for Americans residing abroad: http://www.medicare.gov/people-like-me/outside-us/outside-us.html
Basic rules on non-coverage abroad
In most cases, Medicare won't pay for health care or supplies you get outside the US.
There are a few narrow exceptions to this rule:
• When a foreign hospital is nearer than the nearest US hospital to:
o The place in the US where you have a medical emergency, or
o Your home, for treatment of your medical condition (regardless of whether it is an emergency)
• You are traveling through Canada between Alaska and another state when a medical emergency occurs, and a Canadian hospital is closer than the nearest US hospital that can treat your illness/injury.
• Medically-necessary health care services on a cruise ship which is no more than 6 hours away from a US port.
For greater detail on these exceptions, see: http://www.medicare.gov/Publications/pubs/pdf/11037.pdf
Parts of Medicare
Part A is Hospital Insurance
Individuals who have paid into Social Security for 40 quarters (10 years) or more are eligible to receive Medicare Part A at age 65 (or earlier, under several exceptions). There is no cost for qualified individuals for this coverage. There will be automatic enrollment if you start drawing Social Security (or railroad retirement) benefits at 65. If you start receiving Social Security payments at a later age, you should sign up at 65 for Medicare Part A.
People who do not qualify for premium-free Part A can pay up to $451 a month to buy into it (and are generally required to buy Part B as well).
If you do not sign up for Part A when first eligible, you may have to pay a penalty equal to 10% of the Part A premium for twice the number of years you could have had Part A, but didn't sign up.
Part B is Medical Insurance (doctors fees, etc.)
If you are living abroad, you will not automatically receive Part B, for which there are monthly premiums. It does not cover expenses while abroad; however American medical insurances may require that you sign up for it. TRICARE, the medical care program for military (active and retirees) and their families, which does provide coverage abroad, also requires signing up for Part B.
IMPORTANT: There is a penalty attached to late sign-up for Medicare Part B: for each 12-month period you are eligible for Part B but do not sign up, your premiums for life are increased by 10%. So, for instance, you sign up 5 years after becoming eligible, your premium will be 50% higher than someone who had signed up when initially qualified.
People who anticipate returning to the US in their later years – as well as those who regularly spend time in the US -- may find it financially advantageous to pay premiums for Part B while still living abroad.
Part C is called Medicare Advantage Plans (private group health care plans approved by Medicare – available only within the US).
Anyone who has both Medicare Part A and Part B is eligible. If you move back to the US after living abroad, you can join for the first 2 full months after the month you move back.
People who don't enoll in a Medicare Advantage Plan often take so-called Medicare Supplement Insurance (Medigap) policies to cover differences between actual health care costs and Medicare coverage limits.
Part D is the Medicare Prescription Drug Plan (available only within the US)
Anyone who has both Medicare Part A and Part B is eligible. If you move back to the US after living abroad, you can join for the first 2 full months after the month you move back. There is a monthly base premium, with additional cost for higher-income people. If you join later than your initial sign-up period, you may have to pay a penalty for as long as you maintain the prescription drug coverage.
NOTE: For an overview of Medicare costs (2012) see: http://www.medicare.gov/Publications/Pubs/pdf/11579.pdf
When to sign up for Medicare Plans
When you sign up for the various Medicare coverages – and when each one comes into effect – varies with the different Plans. A general outline follows; specific situations or health conditions touch off a number of different enrollment periods. For fuller details see the publications
Enrolling in Medicare parts A & B:
Understanding Medicare Enrollment Periods parts C & D:
Part A (hospital insurance)
For qualified individuals, sign up during the "Initial Enrollment Period" of 7 months around the month you turn 65 (three months before your birthday month through three months after your birthday month). Note that this may be before you can – or choose to – file for Social Security benefits. If you enroll prior to the birthday month, you will start being covered as of your birthday month. If you enroll during the last 4 months of the period, coverage will start with an additional month's delay.
If you didn't sign up for Part A during your Initial Enrollment Period, you can sign up during the "General Enrollment Period" between January 1 and March 31 each year. Coverage will begin July 1. If you are a qualified individual, there may be a penalty premium for late sign-up, as mentioned above (in case you do not qualify for premium-free Part A).
In certain cases, if you did not sign up for Plan A when initially eligible because you were covered under a group health plan based on current employment, you can sign up later during a "Special Enrollment Period". See Publication 11219 for details.
If you're volunteering abroad: You may also qualify for a Special Enrollment Period if you're a volunteer serving in a foreign country. Usually, you don't pay a late enrollment penalty if you sign up during a Special Enrollment Period. See the Medicare website for more details.
Part B (medical insurance):
For qualified individuals, rules are generally the same as for Part A (above), with the exception of the higher and permanent penalty premium for late sign-up mentioned under the description of Plan B, above.
Part C (Medicare Advantage) and Part D (prescription drugs):
Sign-up is during your Initial Enrollment Period when you first become eligible for Medicare. There are additional enrollment periods each year for switching or joining – see Publication 11219 for details. Note that late sign-up for Part D may engender a permanently higher premium.
If you move back to the United States after living outside the country, your chance to join Part C and/or Part D last for 2 full months after the month you move back to the U.S.